After Stuy Town Default, Tenants Wonder: ‘Who Owns This Place?!’

January 26, 2010

Stuy Town in 1947, the year it opened as a beacon for aspiring middle-class New Yorkers.

Stuy Town in 1947, the year it opened as a beacon for aspiring middle-class New Yorkers.

The latest turn of events in the Stuy Town debacle — a default by the owners, two of the biggest players in the city — has left tenants in the 80-acre, 100-building eastside complex as confused as ever.

Who owns it? Who’s their landlord?

“We’re not quite sure what happened and what’s going to happen,” Al Doyle, president of the Stuyvesant Town and Peter Cooper Village tenants’ association, tells the Voice. “We’re not sure who owns us, and we’re concerned about the management going forward.”

The $4.4 billion loan default by Tishman Speyer Properties and its private equity partner, BlackRock, throws tenants in Manhattan’s biggest apartment complex into “limbo” and straps investors brought in by Tishman and BlackRock with big losses. And those losses are in some cases much bigger than the measly amounts that Tishman and BlackRock themselves anted up ($112 million each) and are now losing, as the Times notes.

Several big-time companies and investors, including billionaire Wilbur Ross, are already eyeing the historic and huge post-WWII development. Ross specializes in what the biz calls “distressed assets” and has previously seized control of mining companies and an array of other big businesses and operations. Bloomberg News reports that Ross is working on a deal with the LeFrak Organization in which LeFrak would manage the property. That doesn’t do the current investors much good for now.

Some of those big creditors — the list includes the California Public Employees’ Retirement System, the Florida pension fund, Fannie Mae, and the Church of England — are at the very least already writing down their investments and will suffer severe losses (click for full list of creditors).

Stuy Town is estimated to be worth about $1.8 billion, only about a third of its value in 2006. Amid lawsuits and an ailing housing market, Tishman has been unable to convert the historically middle-income properties into high-end homes. Dan Garodnick, the Stuy Town councilman who also lives in the complex (in Peter Cooper Village, to be precise), tells the Voice that his immediate goal was to make sure the “tenants have a seat at the table” in the negotiations to come. Will the tenants attempt to purchase the property, as they tried to do in 2006? “Nobody is passing the hat around,” Garodnick says, but he isn’t ruling it out.

Last time around, the tenants’ bid finished third in a decision that some said was rigged by City Hall in favor of the Tishman Speyer bid. See Wayne Barrett’s explanation last fall of the murky politics surrounding the 2006 deal.